It has been said that nearly 61% of businesses are launched with either private capital or capital that is invested into their business by family and friends but investment doesn’t have to stop with merely just your family and friends, which is why equity finance exists. Business finance sources fall into two main categories: internal and external funding. Internal funding comes from the profits made by the business by sale of products or assets. External funding comes from lenders and investors. The most common external finance sources are loans. Short and long-term loans require borrowers to repay funds at an interest rate for a set period of time. Overdraft loans allow a borrower to spend a certain amount of money, and the lender charges interest on the overdraft amount. Debentures are loans that let business owners pay off all loaned funds at a specified time at a set interest rate.